Hot Water Options To Save You Money

When your water heater dies - you want it replaced immediately. Most people end up buying the same again. However, if you'd already researched the options you could be saving money and helping the environment. So what do you need to know to make an informed decision?

There are two main hot water options - storage water heaters and instantaneous water heaters. Within each of these types you can select electric, gas or solar. These options will be explored and discussed below.

STORAGE WATER HEATERS
The water is heated to a high set temperature and kept ready for use in a tank. When you use hot water, it's drawn from the top of the tank and replaced by a layer of cold water at the bottom. The temperature drop is sensed by a thermostat, which turns on the heater at the bottom of the tank.

Although the tank is insulated, it's constantly losing energy. So the water temperature drops over time unless it's reheated. If you draw off hot water faster than the cold water can be heated up, the cold layer can eventually move to the top of the tank -- and you'll run out of hot water.

Storage water heaters are available in electric, gas, solar and heat pump.

Electric
If you connect your heater to a continuous or day-rate supply, electricity is available 24 hours a day and the heater can replace hot water that's been used relatively quickly, therefore making it unlikely that you will run out of hot water. However, the high tariff makes this the most expensive to run.

Off-peak or night-rate systems only receive power for a period during the night. Hot water that's used throughout the day cannot be replaced until the following night. So you need a large tank that can cope with your day's demand, otherwise you may end up without hot water.

Gas
Gas water heaters have a gas energy rating label: the more stars on the label, the more efficient the heater. High-efficiency models are more expensive to buy initially, but cheaper and more environmentally friendly in the long run.

Gas storage heaters only require relatively small tanks, as gas is available 24 hours a day and heat losses can be replaced quickly. Gas heaters can be installed externally, or internally with a flue, which may require more installation work (and cost) than an electric system.

Solar and heat-pump
Solar water heaters use the sun's rays to heat your water. They basically consist of solar collector panels and a storage tank. A heat pump works on the same principle as a fridge or air-conditioner. It doesn't create heat, but transfers it from the air to your hot water tank. If your panels can't be installed in an ideal location, their efficiency may drop and you'll need a larger collector area. Heat pumps don't rely on the sun, so a slightly smaller system is sufficient.

INSTANTANEOUS WATER HEATERS
This type only heats as much water as you need, when you need it. If you turn on the tap, cold water flows through a heat exchanger, igniting a gas burner or switching on an electric element. So there are no heat losses, and as long as there's gas or electricity, you'll never run out of hot water.

Instantaneous water heaters are available in electric and gas.

Electric
Electric instantaneous water heaters have to be connected to the day-rate tariff, so the running costs will probably be higher than with an off-peak storage system. However, because there's no tank to lose heat, they're cheaper to run than day-rate storage heaters.

Gas
Modern systems have an electronic control that ensures a constant temperature. Only if you draw water at a higher rate than that will the temperature drop.

Standard models have a pilot light, which wastes a certain amount of gas. Models with electric ignition are more economical. Gas instantaneous heaters can be installed externally or internally with a flue. As there are no tank heat losses, they're likely to be cheaper to run than gas storage systems.

As you can see there are lots of options to choose from depending on your household requirements, budget and environmental concern. Once you have decided what is right for you, it's a good idea to look into what incentives may be offered by your State and Federal Government as this can help with the cost.